VMware ( NYSE: VMW ) is slated to report fourth-quarter results on Thursday and with the company's potential acquisition by Broadcom ( NASDAQ: AVGO ) being carefully reviewed by regulators, investment firm Monness, Crespi, Hardt is expecting a continuation in slowing growth.
Analyst Brian White, who has a buy rating on VMware ( VMW ), said he expects fourth-quarter revenue to come in at $3.547B, below the Wall Street estimate of $3.63B, up just 10% sequentially and 0.5% year-over-year.
"On a [year-over-year] basis, we are modeling sales growth to remain steady at 0.5% in [fiscal fourth-quarter] compared to up 0.7% in [the third-quarter], but well below the 7% increase reported a year ago," White wrote.
White added that even though VMware's ( VMW ) stock largely escaped the tech bloodbath of 2022 due to its pending acquisition by Broadcom ( AVGO ), it's unlikely that the company's results will not emerge without a few negatives as the global economy weakens.
"During the recently reported December quarter earnings season in tech, the leading, public cloud vendors struck an ominous tone, reporting a marked deceleration in revenue growth," White added.
Looking at fiscal 2024, White expects VMware ( VMW ) to report $3.23B in revenue and $1.44 per share in earnings. VMware ( VMW ) has not offered guidance due to the pending sale.
Late last month, it was reported that Broadcom ( AVGO ) is likely to receive a European Union antitrust warning concerning its planned $61B takeover of VMware ( VMW ) in the coming weeks .
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VMware expected to see slowing growth as Broadcom deal hangs in the wind